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GE MATRIX
Submitted By:-Snehalata MagarPavithra PowarAvinash Kumar
Submitted To :Priya Ramachandran
BCG Matrix
BCG MATRIX It is developed by Boston consultancy group in
1972.It is also known as growth share matrix. STAR-Needs a good deal of investment support as it
operates in a high growth market. They are at a peak of product life cycle, and star indicates a great potential for future.
Mark-in this the future is uncertain, they are in high risk zone
Cash cow-Cows are generators of resources, it brings a lot of cash. Does not require investment as it is in low growth market.
Dog-They are in low growth market and low market share. They actually blocks capital of the company.
Advantages Of BCG
Model is simple and easy to understand.
BCG is applicable to large companies that seek volume and experience effects.
BCG Model is helpful for managers to evaluate balance in the firms current portfolio.
Limitations
High market share is not the only success factor
Market growth is not the only indicator for attractiveness of a market
Sometimes Dogs can earn even more cash as Cash Cows
Firms with small market share can be highly profitable.
General Electric (GE) Matrix
Developed by McKinsey & Company in 1970’s.Also known as Spotlight Matrix.
GE is a model to perform business portfolio analysis on the SBU’s.
GE is rated in terms of ‘Market Attractiveness & Business Strength’
It is an Enlarged & Sophisticated version of BCG.
ABOUT GE MATRIX
It is the management task concerned with the growth and future of business enterprise.
It provides the route map for the firm and helps to take decision in the future with a greater awareness.
STRATEGIC PLANNING
GE Nine-cell Planning Grid:- M
arke
t A
ttra
ctiv
enes
s
Strong Medium Weak
Lo
wM
ed
ium
Hig
hBusiness Strength
GE nine-cell Planning Grid:-Zone
Strategic SignalGreen
Yellow
Red
Invest/Expand
Select/Earn
Harvest/Divest
GE Nine-cell Planning Grid:- Invest/ Expand: In this Zone there is opportunity
to Grow through further Investment & Expansion. This zone is characterized by high business strength & high industry attractiveness which is a Ideal situation for growth. How ever this situation does not remain for a long time.
Example: Initially IT industry most attractive but later on it was facing competition from all sorts of place.
Select/Earn : This zone presents a mix situation in which growth possibility is low. However its presents a opportunities for selective earning.
Harvest/Dives: In the case of red-cell organization has to stop. In this case Harvesting or Divesting strategies suitable. Harvesting means withdraw from a business but withdrawal is not immediate. Initially focus is on cost-cutting i.e In R&D and advertising, the objective is to earn short term profit.
Market Attractiveness
Annual market growth rate
Overall market size Historical profit margin Current size of market Market structure Market rivalry Demand variability Global opportunities
Current market share Brand image Production capacity Corporate image Profit margins relative to competitors R & D performance Promotional effectiveness
Business Strength
Study of TATA
TATA
• IT (Information Technology) : TCS
• Consumer Durable : Automobiles, Titan etc.
•Textiles : Tata Fabrics, West Sides etc
GE Matrix For TATA
Business Strengths
Mar
ket
A
ttra
ctiv
enes
s
Low
High
WeakStrong
IT Consumer Durables
Textiles
BCG & GE Matrix
Mar
ket
Att
ract
iven
ess
Business Strength
Mar
ket
Gro
wth
Relative Position
(Market Share)
BCG v/s GE
BCG GE
Market Growth
Market share
4 cell
Multi Products
Primary tools
Market Attractiveness
Market strength
9 cell
Multi Business Units
Secondary tools
THANKING YOU